India: Effects of Tariffs and Nontariff Measures on U.S. ... - USITC

eportedly preferred in southern <strong>India</strong>. 105 Pistachios are not grown in <strong>India</strong>, so dem<strong>and</strong> is
met entirely though imports. 106 Reportedly, they are viewed as a luxury good <strong>and</strong> are a
popular gift <strong>and</strong> festival item during major <strong>India</strong>n holidays. 107 Almonds are most popular
in northern <strong>India</strong>. Walnuts have primarily been consumed during festival season
(September to January), but they are beginning to be consumed year-round as awareness
<strong>of</strong> their health benefits grows <strong>and</strong> as they become available in vacuum packs. 108
Beverages
Production
<strong>India</strong> is the largest producer <strong>of</strong> tea in the world, reaching 944,000 mt in MY 2007/08.
<strong>India</strong>n c<strong>of</strong>fee production, at 262,000 mt in MY 2007/08, is also large <strong>and</strong> mainly
exported (75 percent in MY 2005/06). Other nonalcoholic beverages produced in <strong>India</strong>
include carbonated <strong>and</strong> noncarbonated drinks. The carbonated segment has sizable
organized production. Noncarbonated drinks are mainly fruit based. For alcoholic
beverages, production includes beer <strong>and</strong> grain-based alcoholic beverages. Wine
production is a relatively new endeavor, building on <strong>India</strong>’s sizable production <strong>of</strong> table
grapes. Wine grape production <strong>and</strong> most <strong>of</strong> <strong>India</strong>’s wineries are located in Maharashtra.
Wine production reached approximately 920,000 nine-liter cases in 2008. 109
Consumption
Among nonalcoholic beverages, the <strong>India</strong>n beverage <strong>of</strong> preference is overwhelmingly tea,
which <strong>India</strong>ns call chai. <strong>India</strong> is the world’s largest consumer <strong>of</strong> tea, typically brewed
with a variety <strong>of</strong> spices, such as cardamom, cinnamon, <strong>and</strong> cloves. 110 A study <strong>of</strong> the
<strong>India</strong>n hot drinks market found that that tea comm<strong>and</strong>ed 69 percent <strong>of</strong> the beverage
market by value in 2007, while c<strong>of</strong>fee held only 10 percent. 111 A survey found that
77 percent <strong>of</strong> <strong>India</strong>ns drank tea or c<strong>of</strong>fee every day in 2006. 112 Historically, there has
been little interest in c<strong>of</strong>fee, except perhaps in the south, but this pattern is beginning to
change, <strong>and</strong> there is a rise in the number <strong>of</strong> high-end c<strong>of</strong>fee shops. 113
Besides tea <strong>and</strong> c<strong>of</strong>fee, <strong>India</strong>ns drink a wide variety <strong>of</strong> nonalcoholic beverages, including
carbonated drinks, juices, bottled water, <strong>and</strong> milk, as well as traditional <strong>India</strong>n drinks
such as lassis (a yogurt drink) <strong>and</strong> badam doodh (a milk <strong>and</strong> almond drink). A survey on
the s<strong>of</strong>t drinks market found that in 2007, carbonated drinks had the biggest market share
by value, followed by bottled water <strong>and</strong> juices. 114 With regard to international br<strong>and</strong>s,
105 Industry <strong>of</strong>ficial, interview by Commission staff, Mumbai, <strong>India</strong>, May 11, 2009; Vinayak, “Retailing
the King <strong>of</strong> Nuts,” July 31, 2008.
106 USITC, Hearing transcript, April 21, 2009, 30 (testimony <strong>of</strong> Mr. Masten, Paramount Farms).
107 Government <strong>of</strong>ficial, interview by Commission staff, New Delhi, <strong>India</strong>, May 4, 2009; industry <strong>of</strong>ficial,
interview by Commission staff, Mumbai, <strong>India</strong>, May 11, 2009; <strong>and</strong> USITC, Hearing transcript,
April 21, 2009, 30 (testimony <strong>of</strong> Mr. Masten, Paramount Farms).
108 Aradhey, <strong>India</strong>: Tree Nuts, September 11, 2008, 7.
109 JBC International, Inc., “Comprehensive Study <strong>of</strong> the <strong>India</strong>n Wine Market,” 2008, 10.
110 EIU, <strong>India</strong> Food: Sub-Sector Update, November 11, 2008.
111 DATAMONITOR, “Hot Drinks in <strong>India</strong>,” October 2008.
112 Yadav <strong>and</strong> Kumar, “The Food Habits <strong>of</strong> a Nation,” August 14, 2006. Given tea’s market share, most
<strong>of</strong> these hot drinks are likely tea rather than c<strong>of</strong>fee.
113 EIU, <strong>India</strong> Food: Sub-Sector Update, November 11, 2008.
114 In this instance, “s<strong>of</strong>t drink” does not refer exclusively to carbonated beverages.
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